What constitutes a valid assignment of a contract?

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • What constitutes a valid assignment of a contract?
  • When is assignment of contracts relevant for consideration?
  • What is an assignment—by consent, by operation of law, legal or equitable assignment?
  • Simple example of an assignment of a contract
  • What parts of a contract can be assigned—benefit, not burden
  • Delegation and sub-contracting
  • Do you need consent to assign a contract?
  • Express prohibition against assigning
  • Trust
  • Assignment of receivables
  • More...

What constitutes a valid assignment of a contract?

This Practice Note identifies what can be transferred when assigning rights under a contract and how to effect a valid assignment of a contract. For guidance on common contract assignment scenarios, see Practice Note: Assigning contracts—common scenarios and considerations.

Note also that when discussing assigning contractual rights, reference may also be made to assigning ‘chose in action’ in the sense that the benefit of a contract has been held to be a chose in action.

When is assignment of contracts relevant for consideration?

Contracts, or rather, rights under contracts, are frequently assigned as part of the way companies run their businesses. When advising a party in relation to a proposed or purported assignment (transfer) of a contractual right where there may be a dispute, you will need to consider:

  1. what, when and how rights can be assigned

  2. how an assignment can be challenged

For detail on how to vary or transfer rights and obligations under a contract by way of variation or novation, see Practice Notes:

  1. When is variation of a contract valid?

  2. Novation—why and how to novate a contract

Assignment of rights is an important issue in construction contracts where the lifecycle of a building will involve lots of interested parties. There will be the original parties involved in the construction of the building, such as the contractor, developer, consultants, sub-contractors

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